Albertsons Companies, Inc. Joins Meal Kit Race With Plated Acquisition

Albertsons Companies, Inc., one of the nation’s largest grocers, announced that it is buying meal kit company Plated.

According to CNBC, the Albertsons Companies, Inc. deal is the grocer’s first big strategic move since Amazon’s $13.7 billion deal to acquire Whole Foods Market earlier this year, which sent Kroger’s stock plummeting roughly 30 percent since the deal was announced.

“This transaction is the latest example of Albertsons meeting our customers wherever and however they like to shop,” said Bob Miller, chairman and CEO of Albertsons Companies, Inc. “We are excited to offer our customers more online options and fresh, quality ingredients along with distinctive recipes at their doorstep or through traditional shopping trips.”

Grocery delivery startups attracted $1.4 billion in venture funding in 2016. And while just 23 percent of Americans buy groceries online, that share is expected to more than triple in under 10 years.

“As meal kits continue to gain traction in the marketplace, we believe the winning formula combines choice, flexibility, culinary expertise and the ability for customers to buy across channels – all of which we are now singularly positioned to deliver in collaboration with Albertsons,” said Josh Hix, co-founder and CEO of Plated.

In July, Amazon sent a signal that it is ready to join the industry when it registered a U.S. trademark for a service that will provide customers with “prepared food kits … ready for cooking and assembly as a meal.” Currently, 31 million households have access to an Amazon Prime membership, and more than half of them already purchase groceries online via the website. Factor in its access to the roughly 400 Whole Foods stores across the U.S., and Amazon is poised to become a fierce competitor in the meal kit space.

Private equity firm Cerberus Capital Management and a consortium of investors helped to form Albertsons Companies LLC in 2006; the company later merged with the grocer Safeway in 2015. The grocery store filed for an IPO in 2015, but put those plans on hold due to market jitters and, later, as Kroger’s stock faltered. The IPO continues to be on hold since Amazon’s Whole Foods acquisition.